Making A Case For Asterisk
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With small businesses increasingly receptive to voice-over-IP solutions, solution providers and system builders are finding custom-built
solutions growing into a not-so-small niche.
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One such solution provider, Switchvox, has developed Switchvox SoHo and Switchvox SMB, along with its own servers, based on Asterisk, an open-source
developed primarily on
Linux.
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The company was founded as Four Loop Technologies by four open-source developers who had worked together at MP3.com and other technology companies before forging out on their own three years ago. It began as a software
and engineering firm, but changed course after the company created its own low-cost
system using Asterisk.
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The company successfully set up its own system, which had all the features it wanted, said Joshua Stephens, CEO of Switchvox, and that led to thoughts of turning it into a product. But Stephens said he and his team realized the system would be too difficult to use for the average small-business owner who was unschooled in open- source technology.
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"We wanted to take
and make it usable so ... that people could deploy Asterisk at their company without going mad," Stephens said. "That's what we sat down to do. We wanted to build something for the end user to use."
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In February 2005, the company launched its products and began selling them on custom-built servers for entry-level users and on servers from Hewlett-Packard and Dell for higher-end deployments. The typical entry-level system can handle 25 calls at one time and the commercial servers between 50 and 80 calls, depending on configuration. The Switchvox SoHo product was designed to handle 15 users and the
product up to 100 users.
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Switchvox's channel developed organically once its products were on the market. Stephens said that Switchvox developed its own channel program six months after it began selling the products because so many VARs and integrators began asking to resell the solution.
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"The reason we do it is because they have a bunch of customers who need phone systems. These are VARs and integrators [that have] never installed any phone system before because that was always the job of the telecom guy," Stephens said. "Now they actually have an option to build a phone system for their customers. It's just clicked for them."
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The company has seen revenue double every quarter over the previous year, and about half of that business is through its reseller channel. Customers who inquire about the product who don't have an existing network
are passed to local solution providers, according to Stephens.
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Bob Murphy, president of Arreva Communications, Irvine, Calif., has been reselling Switchvox's SoHo and SMB products for about four months, and the year-old company is hoping to do between 20 and 25 deployments each month.
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"I saw a tremendous opportunity to bring like features and capabilities of a Cisco system down to the small-business marketplace and at a small-business price tag," said Murphy, whose previous incarnation in the VAR world was as a Cisco solution provider.
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"What I liked about the whole thing was that, having been in enterprise
reselling, we saw this whole space as being highly disruptive to the major players out there who are all really kind of scrambling to get their downmarket offerings together," he said.
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Whereas a Cisco system for a 50-person office could run as high as $50,000, bringing in 5 percent margins on hardware and about 20 percent margins on licensing and software, the Switchvox product costs about $25,000 and the margin is about 50 percent, he said.
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"We really like it. We don't have to deal with Cisco, which is an added benefit. We can use their products and we don't have to deal with them and their high maintenance and licensing fees," Murphy said.
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Greg Boehnlein, vice president of N2Net, a Switchvox reseller in Cleveland, echoes Murphy's sentiments on price points and margins. "In business terms, if I go and I take an Asterisk-based solution into a client, my cost is usually about 40 percent to 50 percent less than a comparable Cisco or Avaya solution. The Asterisk solutions allow us to sell at a 30 percent to 40 percent profit margin," Boehnlein said. "There's no cost for the licensing."
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The Switchvox open-source VoIP systems are small-business friendly because they're easy to use, he said. While open-source systems are lower-cost, finding one that has an attractive
to appeal to the small-business end user brought N2Net to the vendor.
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"It appeals to the guy who's the IT manager who doesn't have a whole lot of knowledge about telephony, but is now being tasked with managing the telephony infrastructure on the network," he said.
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It's also easier for solution providers to deploy. "I can have a system up and running for a customer in half a day. That's insane compared to other solutions I've seen with commercial platforms that take six months to deploy and you're putting in 20 phones," Boehnlein said.
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Other open-source VoIP solution providers see the same opportunitybringing high-end functionality for lowbrow prices, disrupting the current VoIP market. Chicago-based Scaled Voice resells configured Asterisk boxes with its own system, also geared toward the small business.
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"You get the big boy toys but for a price they can afford. A lot of these systems price themselves out of the market for the small business. You can bring all of the features and a lower cost. There is a market there that's on tap," said Ed Holden, project manager.
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For Boehnlein, open-source technologies have the ability to revolutionize VoIP.
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"You can do anything with Asterisk. The amount of support that you get from the community is fantastic. Think about all of the thousands of people who look at the code. It's never going to be perfect, it's never going to be good enough, so it will always evolve. That's why I think it's such a disruptive and exceptional technology," he said.